In today’s briefing:
- Recruit (6098) Launches ANOTHER Big Buyback
- Mitsubishi Estate Logistics REIT Placement – Decent Track Record but Lacks Accretion
- Mitsubishi Estate Logistics (3481 JP): Offering Could Trigger Outperformance Vs Peers Like Last Time
- Money Forward – Q3 22 Results Reaction: Revenue Is Growing but so Are EBITDA Losses
- Money Forward (3994) | Major Improvement in Corporate Client Acquisition
- Money Forward: Top Line Beats Consensus but Losses Widen Further
- Fast Retailing – The New Medium-Term Plan For Europe Is As Ambitious As The North America Plan
Recruit (6098) Launches ANOTHER Big Buyback
- In January 2022, Recruit Holdings (6098 JP) launched a Tender Offer buyback to buy back shares from NTT Data, Hakuhodo, and TBS.
- Today, Recruit announced another buyback of up to 42mm shares (2.57% of shares out) spending up to ¥150bn, to go from now until 14 March 2023 (5mos).
- This time the buyback should have better traction and market impact, but it is not overwhelming, and the impact will likely lessen at higher share prices.
Mitsubishi Estate Logistics REIT Placement – Decent Track Record but Lacks Accretion
- Mitsubishi Estate Logistics (3481 JP) (MEL) is looking to raise US$145m from its primary follow-on offering to acquire eight properties.
- The offering is a large one, resulting in a 10.2% dilution, and would represent 34 days of three month ADV.
- In this note, we will look at the deal dynamics, and run the deal through our framework.
Mitsubishi Estate Logistics (3481 JP): Offering Could Trigger Outperformance Vs Peers Like Last Time
- Last Friday, small-cap logistics JREIT Mitsubishi Estate Logistics (3481 JP) (“MEL“) announced a follow-on equity offering to fund part of their recently-announced property acquisition.
- The primary offer quantity is 51,000 units. In addition, there will also be an over-allotment quantity of 2,550 units. The total size of this offering could be roughly ¥23bn (~US$157mn).
- Below is a closer look at the details of this offering and the potential of this offering to trigger strong secondary market performance in the following weeks.
Money Forward – Q3 22 Results Reaction: Revenue Is Growing but so Are EBITDA Losses
- Revenue growth rebounded in Q4 and was the best in six quarters as corporate sales accelerated, particularly in the medium business segment
- But EBITDA losses accelerated and whilst management says this is the peak quarter, this is the first time since 2019 that EBITDA excluding advertising costs was negative
- Guidance for Q4 is mixed with a conservative revenue target and a only a modest reduction in EBITDA losses
Money Forward (3994) | Major Improvement in Corporate Client Acquisition
- Money Forward Q3 sales rose +42% YoY to Y5.5bn driven by corporate ARR (+54% YoY)
- Net sales, ARR, and EBITDA loss of -Y1.9bn all in line with company guidance
- Growth investment starting to pay off as Corporate Client acquisition rate DOUBLES
Money Forward: Top Line Beats Consensus but Losses Widen Further
- Money Forward reported 3QFY11/2022 results. Revenue increased 42.2% YoY to JPY5.45bn (vs consensus JPY5.40bn) while adjusted op.losses further widened to JPY2.5bn vs JPY449m in the same period a year ago.
- Though top line growth has resumed following a slowdown in 2QFY11/2022, MF’s margins have further worsened with increased investment in advertising, staff and subsidies.
- MF’s share price fell almost 8% following earnings announcement as investors are concerned over deteriorating profitability.
Fast Retailing – The New Medium-Term Plan For Europe Is As Ambitious As The North America Plan
- Fast Retailing (9983 JP)’s 4QFY22 was yet again a surprise to the upside as revenue grew 23.2% YoY to ¥536.0bn while OP grew 24.3% YoY to ¥26.2bn.
- Having rallied close to 60% following an earnings beat in 3QFY22, we were bearish on the company expecting weak guidance for FY23, but the company surprised with optimistic FY23 guidance.
- With China struggling to maintain the historical growth momentum and North-America falling short of its medium-term plan, we anticipate downside to Fast Retailing’s FY23 guidance over the next 12 months.
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